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Masters of the Market: Finance Club Mentors High School Students

4/27/2007

“Buy, Sell, Buy, Sell, Sell!” These were the cries of local high school students participating in a mock trading session run by the College of Business Finance Club. In a Champaign Centennial High School classroom in April, Anirudha “AJ” Jalan, a junior in finance, was explaining to the students about the importance of buying low and selling high.

“It’s your goal to maximize your clients’ wealth, meaning buy low and sell high for them!” said Jalan. “In general the better you do this, the happier your clients will be and the more business you’ll receive. Just make sure you don’t offer to buy at a price higher than someone is already willing to sell.”

Jalan, along with Finance Club members Scott Schultz, Ankana Sheth, Elyssa Fromm, Andrew Lee, Diane Driscoll, Anthony De Leon, Samip Pandya, and Gail Bernstein, work as a team to orchestrate the mock trading session and to ensure that everyone plays their respective roles.

The high school students are the broker/dealers on the floor of the “Urbana-Champaign Stock Exchange.” The Finance Club students act as the runners (who dole out the client orders); the clerks (who chalk up the bids); the specialist (who maintains fair and orderly markets), and the assistants (who help students add up commissions and profits). The exercise allows the high school students to experience the two-sided auction system on which U.S. financial markets are based.

Judy Roegge, who teaches a financial management class at the high school, welcomes the fun – and the learning – that the club brings to her students every semester. The club has been hosting stock market simulations in at various high schools in and around Urbana and Champaign area high schools for more than eight years.

“The kids get a feel for how the stock market works,” she said. “Seeing it online is one thing, but interacting and participating is quite another. Some students naturally are more aggressive than others, and in the event surveys we get some students say they wish they would have been more assertive and aggressive throughout the whole securities exchange teaching unit.”

Elisabeth Oltheten, a faculty advisor to the club and professor of finance, developed the first web-based trading simulation, the University of Illinois Securities Simulation (UISES), in 1993. What started as an in-class competition of portfolio management with $1 million of fun money per student soon became an intercollegiate competition, then spread to area high schools. The Champaign Rotary Club donates prizes to the students, teachers, and schools who generate the most wealth in the online simulation. Members of the Finance Club host the mock trading session in the classroom to help hit the online lessons home.

Virginia France, who also serves as a faculty advisor to the group, said that the best thing she and Oltheten can do is to get out of club member’s way. “They are all a bunch of self-starters and organizers by nature, and the club president and executive board run it just like a corporation,” said France. “This is not surprising, since when they graduate they’ll likely be doing the same thing, perhaps working as investment bankers or even starting their own business.”

“We’re here to serve as anchors or cheerleaders and have stepped back to let them do what they do best,” said Oltheten. “We may alert them to a company that would like to make contact with them, or advise them on a great idea they have and let them run with it. Most of them I’d snap up if I had companies,” she added.

France, who also teaches investments and derivatives along with a survey of finance freshman orientation course, says she often thinks of herself more as a “roadie” in setting up equipment for meetings, rather than as a director of the program.

“The club is really useful for people who are thinking of finance as a major,” France said. “They come to a couple of meetings and get a sense of the big picture along with an idea of where finance goes, such as personal finance, investment advising or banking, depending on the area of specialization that week.”

France said she sees that the club is an important part of the College’s strength of placement, advising, and recruiting. “Each meeting can be a mini-career fair for a co-sponsoring company that participates as a guest speaker,” she said. “It also gives students a chance to interact with business people in a professional environment, and, of course, learn more about the profession and where it can take them.”

The club is unique in that it’s open to anyone on campus with an interest in finance – not just College of Business students. There are typically between 600-800 members on its email list and 250 paid memberships every semester.